to what the extence of ‘The extensive use of financial ratios by both practitioners and researchers is often motivated by tradition and convenience rather than resulting from theoretical considerations or from a careful statistical analysis’ (Lev and


Financial ratios are extensively used by financial analysts, auditors, investors, shareholders, researchers, practitioners and management of the organizations to evaluate and identify different factors, trends and performance of the company. Financial ratios are also used to evaluate the current performance of the company against its past performances as well as performance of competitors and overall industry. 
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